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The Treadwater Bank wants to raise $ 1,000,000 using​ three-month commercial paper. The net proceeds to...

The Treadwater Bank wants to raise $ 1,000,000 using​ three-month commercial paper. The net proceeds to the bank will be $ 987,000. What is the effective annual rate of this financing for​ Treadwater? Magna Corporation has an issue of commercial paper with a face value of $ 1,000,000 and a maturity of six months. Magna received net proceeds of $ 975,347 when it sold the paper. What is the effective annual rate of the paper to​ Magna? Assume that the prime rate is 7.9 % APR​, compounded quarterly. How much dollar savings in interest did Treadwater and Magna achieve by accessing the commercial paper​ market?

A. The effective annual rate of this financing for Treadwater is _____​%. ​ (Round to two decimal​ places.)

B. The effective annual rate of this financing for Magna is _____​%. ​ (Round to two decimal​ places.)

C. Treadwater saved _______.

Magna saved_______.

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ekkarill92 answered 1 year ago
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